OMB files this
comment in accordance with 5 CFR 1320.11( c ). This OMB action is
not an approval to conduct or sponsor an information collection
under the Paperwork Reduction Act of 1995. This action has no
effect on any current approvals. If OMB has assigned this ICR a new
OMB Control Number, the OMB Control Number will not appear in the
active inventory. For future submissions of this information
collection, reference the OMB Control Number provided. The agency
will respond to comments received on the ICR in the final
rule.
Inventory as of this Action
Requested
Previously Approved
36 Months From Approved
0
0
0
0
0
0
0
0
0
The Department is proposing a
regulation under ERISA section 3(21)(A)(ii) and Code section
4975(e)(3)(B) (Proposed Regulation). The Proposed Regulation would
amend the definition of a "fiduciary" under ERISA and the Code to
specify when a person is a fiduciary by reason of the provision of
investment advice for a fee or other compensation regarding assets
of a plan or IRA (i.e., an investment advice fiduciary). If
adopted, the Proposed Regulation would replace an existing
regulation dating to 1975, with the aim of more appropriately
distinguishing between the sorts of advice relationships that
should be treated as fiduciary in nature and those that should not.
Paragraph (b)(1)(i) of the proposed regulation provides a carve-out
to the general investment advice fiduciary definition for advice
provided in connection with an arm's length sale, purchase, loan,
or bilateral contract between a sophisticated plan investor that
has 100 or more plan participants and the adviser ("seller's
carve-out"). It also applies in connection with an offer to enter
into such a transaction or when the person providing the advice is
acting as representative, such as an agent for the plan's
counterparty. The person must provide advice to a plan fiduciary
who is independent of the counterparty and must exercise authority
or control respecting the management or disposition of the plan's
assets, with respect to an arm's length sale, purchase, loan or
bilateral contract between the plan and the counterparty, or with
respect to a proposal to enter into such a sale, purchase, loan or
bilateral contract. The seller's carve-out applies if certain
conditions are met. Among these conditions are the following: the
adviser must obtain a written representation from the plan
fiduciary that (1) the plan fiduciary is a fiduciary who exercises
authority or control respecting the management or disposition of
the employee benefit plan's assets (as described in ERISA section
3(21)(A)(i), (2) the employee benefit plan has 100 or more
participants covered under the plan, and (3) the fiduciary will not
rely on the person to act in the best interests of the plan, to
provide impartial investment advice, or to give advice in a
fiduciary capacity. Another carve-out is directed to service
providers, such as recordkeepers and third party administrators
that offer a "platform" or selection of investment vehicles to
participant-directed individual account plans under ERISA.
Specifically, paragraph (b)(3) of the proposed regulation makes
clear that persons who merely market and make available securities
or other property through a platform or similar mechanism to an
employee benefit plan without regard to the individualized needs of
the plan and its participants, or beneficiaries do not act as
investment advice fiduciaries. In order for the platform provider
carve-out to apply, the person providing the platform must provide
a written disclosure to the plan fiduciary stating that the person
is not undertaking to provide impartial investment advice or to
give advice in a fiduciary capacity. Paragraph (b)(6) of the
proposal makes clear that furnishing and providing certain
specified investment educational information and materials
(including certain investment allocation models and interactive
plan materials) to a plan, plan fiduciary, participant, beneficiary
or IRA owner will not constitute the rendering of investment advice
if certain conditions are met. One of the conditions is that the
asset allocation models or interactive materials must explain all
material facts and assumptions on which the models and materials
are based and include a statement indicating that, in applying
particular asset allocation models to their individual situations,
participants, beneficiaries, or IRA owners should consider their
other assets, income, and investments in addition to their
interests in the plan or IRA to the extent they are not taken into
account in the model or estimate.
US Code:
29
USC 1135 Name of Law: Employee Retirement Income Security
Act
The Department is proposing a
regulation under ERISA section 3(21)(A)(ii) and Code section
4975(e)(3)(B) (Proposed Regulation). The Proposed Regulation would
amend the definition of a "fiduciary" under ERISA and the Code to
specify when a person is a fiduciary by reason of the provision of
investment advice for a fee or other compensation regarding assets
of a plan or IRA (i.e., an investment advice fiduciary). If
adopted, the Proposed Regulation would replace an existing
regulation dating to 1975, with the aim of more appropriately
distinguishing between the sorts of advice relationships that
should be treated as fiduciary in nature and those that should not.
Paragraph (b)(1)(i) of the proposed regulation provides a carve-out
to the general investment advice fiduciary definition for advice
provided in connection with an arm's length sale, purchase, loan,
or bilateral contract between a sophisticated plan investor that
has 100 or more plan participants and the adviser ("seller's
carve-out"). It also applies in connection with an offer to enter
into such a transaction or when the person providing the advice is
acting as representative, such as an agent for the plan's
counterparty. The person must provide advice to a plan fiduciary
who is independent of the counterparty and must exercise authority
or control respecting the management or disposition of the plan's
assets, with respect to an arm's length sale, purchase, loan or
bilateral contract between the plan and the counterparty, or with
respect to a proposal to enter into such a sale, purchase, loan or
bilateral contract. The seller's carve-out applies if certain
conditions are met. Among these conditions are the following: the
adviser must obtain a written representation from the plan
fiduciary that (1) the plan fiduciary is a fiduciary who exercises
authority or control respecting the management or disposition of
the employee benefit plan's assets (as described in ERISA section
3(21)(A)(i), (2) the employee benefit plan has 100 or more
participants covered under the plan, and (3) the fiduciary will not
rely on the person to act in the best interests of the plan, to
provide impartial investment advice, or to give advice in a
fiduciary capacity. Another carve-out is directed to service
providers, such as recordkeepers and third party administrators
that offer a "platform" or selection of investment vehicles to
participant-directed individual account plans under ERISA.
Specifically, paragraph (b)(3) of the proposed regulation makes
clear that persons who merely market and make available securities
or other property through a platform or similar mechanism to an
employee benefit plan without regard to the individualized needs of
the plan and its participants, or beneficiaries do not act as
investment advice fiduciaries. In order for the platform provider
carve-out to apply, the person providing the platform must provide
a written disclosure to the plan fiduciary stating that the person
is not undertaking to provide impartial investment advice or to
give advice in a fiduciary capacity. Paragraph (b)(6) of the
proposal makes clear that furnishing and providing certain
specified investment educational information and materials
(including certain investment allocation models and interactive
plan materials) to a plan, plan fiduciary, participant, beneficiary
or IRA owner will not constitute the rendering of investment advice
if certain conditions are met. One of the conditions is that the
asset allocation models or interactive materials must explain all
material facts and assumptions on which the models and materials
are based and include a statement indicating that, in applying
particular asset allocation models to their individual situations,
participants, beneficiaries, or IRA owners should consider their
other assets, income, and investments in addition to their
interests in the plan or IRA to the extent they are not taken into
account in the model or estimate.
$0
No
No
No
No
No
Uncollected
Chris Cosby 202
693-8540
No
On behalf of this Federal agency, I certify that
the collection of information encompassed by this request complies
with 5 CFR 1320.9 and the related provisions of 5 CFR
1320.8(b)(3).
The following is a summary of the topics, regarding
the proposed collection of information, that the certification
covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a
benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control
number;
If you are unable to certify compliance with any of
these provisions, identify the item by leaving the box unchecked
and explain the reason in the Supporting Statement.